The Company Act 2063 (2006) is the backbone of Nepal's corporate governance framework. Designed to foster transparency, accountability, and economic growth, this Act regulates the entire lifecycle of a company — from incorporation and operation to liquidation.

Replacing the Company Act 2053, it introduced groundbreaking reforms like faster registration, independent directors for public companies, and mechanisms for investor protection, aligning Nepal with global corporate standards.

Whether you're a budding entrepreneur, a foreign investor, or a legal professional, this comprehensive guide breaks down the Act's key provisions and practical applications.

💡 Quick Fact: The Company Act 2063 consists of 21 chapters and 188 sections, covering every aspect of company law.

You may download a official copy of the Company Act 2063 from Nepal Law Commission. The Company Act 2063 is also called the Companies Act 2063 and will be used interchangeably in this article.

What’s New in the Company Act 2063?

This section highlights key differences introduced in the Company Act 2063 compared to its predecessor, the Company Act 2053.

🎯 Why It Matters: These changes encourage foreign investment, improve corporate accountability, and simplify doing business in Nepal.

Types of Companies Under the Act

The Companies Act 2063 categorizes companies based on ownership, purpose, and operations:

💡 Did You Know? Nonprofit companies must reinvest all profits in their objectives and cannot distribute dividends.

Incorporation and Registration Process

Registering a company in Nepal is a streamlined process under the Companies Act 2063.

Step-by-Step Process:

1. Reserve company name by creating an account at the Office of the Company Registrar (OCR)'s online platform
2. Prepare Essential Documents
   • Memorandum of Association (MoA): Defines the company's objectives and structure.
   • Articles of Association (AoA): Details internal governance rules.
3. Submit Documents to the OCR:
   • Additional documents: Promoters' identification, company name approval, and fee payment.
4. Approval and Registration:
   • OCR reviews the application, granting registration within 15 days if requirements are met.

💰 Cost Estimate: Registration fees typically range between NPR 5,000 to NPR 25,000, depending on the company's capital.

Key Documents: Memorandum and Articles of Association

Both documents must be drafted carefully to avoid legal complications.

Shares and Debentures

This section governs the issuance and management of shares and debt instruments:

• Minimum Face Value: NPR 50 for public companies.
• Share Issuance Deadlines: Shares must be allotted within 3 months of subscription closure.
• Debentures: Issued as a means of raising debt, requiring trustee oversight to protect investor interests.

Role of the Board of Directors

The Board of Directors (BoD) is responsible for a company’s strategic direction and compliance.

• Composition: Public companies must have 3-11 directors, including at least one independent director.
• Appointment: Directors are elected by shareholders or appointed by promoters.
• Key Duties: Ensure legal compliance, approve budgets, and oversee operational strategies.

📌 Example: Directors must disclose conflicts of interest to maintain transparency.

Accounting, Auditing, and Financial Reporting

• Double-Entry System: All companies must maintain financial records.
• Audit Committees: Required for public companies with NPR 30M+ capital to oversee financial integrity.
• Annual Reporting Deadlines: Financial statements must be prepared and submitted on time to avoid penalties.

Liquidation and Company Closure

• Voluntary Liquidation: Initiated via a special resolution by shareholders, provided the company can pay its liabilities.
• Insolvency: Courts oversee cases where companies are unable to pay debts.

Common Mistakes to Avoid

1. Incomplete Documentation: Ensure MoA and AoA comply with regulatory standards.
2. Late Financial Reporting: Fines apply for delays.
3. Failure to Disclose Conflicts: Directors must disclose potential conflicts of interest.

🔑 Case Study: A public company faced penalties for failing to issue shares within the 3-month deadline.

Penalties, Lawsuits, and Offences

Expert Tips for Companies Act Compliance

1. Start Early: Begin financial reporting preparations ahead of deadlines.
2. Hire Qualified Auditors: Public companies must meet strict auditing standards.
3. Maintain Records: Properly maintain share registers, minutes, and board resolutions.

FAQs About Companies Act 2063

Q: Can foreigners register a company in Nepal?
A: Yes, under the Act, foreign companies can establish branch offices.

Q: What is the minimum share capital for public companies?
A: NPR 10 million.

Q: How long does registration take?
A: 15 days, if all requirements are met.

What’s Next?

🎯 Ready to Register a Company in Nepal? 
Contact our experts for company registration, legal advice, or corporate compliance support.

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